Bitcoin's $105k Showdown: Bulls Face Liquidation Wave

Bitcoin's price experienced a significant correction after a record $1.8 billion in long-position liquidations, pushing the cryptocurrency toward a critical $105,000 support level. Over the past 24 hours, more than 370,000 traders were liquidated, with the majority of losses concentrated in Bitcoin and Ethereum positions. This marked the largest liquidation event of 2025, according to data from CoinGlass, as the crypto market capitalization fell by over $150 billion to $3.95 trillion. The selloff followed a failed attempt to break above $117,968, triggering a sharp decline to $112,725.

Technical analysis highlights a bearish outlook, with a bearish engulfing candle forming on the daily chart after the price rejected key resistance at $117,000–$118,000. The 100-day EMA at $111,882 was briefly breached, and momentum indicators like RSI and MACD turned negative, signaling downward pressure. Short-term traders are now watching the $112,000–$113,500 range as a pivotal battleground. A sustained move above $113,500 could rekindle a rally toward $116,000–$117,500, while a breakdown below $112,000 could accelerate the decline toward $107,200.

The liquidation event has reset leverage in the market, with open interest collapsing by nearly $2 billion and funding rates normalizing. Analysts note that such corrections often clear excessive leverage, potentially creating a base for a more sustainable recovery. However, the path forward remains uncertain. The Federal Reserve’s 25-basis-point rate cut earlier in the month initially fueled a rally to $118,000 but failed to sustain momentum. Chair Jerome Powell’s cautious remarks and the 10-year Treasury yield at 4.148% continue to weigh on risk assets.

Bitcoin’s price has historically performed well in October (“Uptober”), but current volatility contrasts with past trends. The 9.5% decline from the August peak is shallower than typical bull market corrections, with some analysts suggesting the drop may still test the $105,000–$100,000 support zone, including the 200-day moving average at $103,700. IG market analyst Tony Sycamore argues that a retest of this level could flush out weak hands and create a buying opportunity for a year-end rally.

Regulatory developments add another layer of complexity. The SEC and CFTC’s joint efforts to harmonize crypto regulations, including potential 24/7 trading hours, could influence market dynamics in the long term. However, immediate focus remains on technical and macroeconomic factors. The $105,500–$115,200 range represents a critical on-chain cost basis for 85–95% of Bitcoin’s supply, making it a key area for bulls to defend.

Market participants remain divided on the outlook. While institutional inflows, including BlackRock’s $239 million Bitcoin ETF purchase in June 2025, suggest continued accumulation, the recent liquidations highlight the fragility of leveraged positions. Cumulative Volume Delta (CVD) has shifted to a near-balanced state after weeks of sell pressure, indicating a potential stabilization phase. However, the risk of further downward moves persists if the $105,000 support fails, potentially triggering a shift in Bitcoin’s narrative from “digital gold” to a high-risk asset.